As streaming becomes the dominant way people consume TV, a shift toward programmatic buying is accelerating. The increasing availability of biddable inventory, combined with the flexibility that programmatic offers, is prompting some to question the necessity of a TV upfront that demands hefty ad dollar commitments.
It’s reasonable to speculate that a world where a few networks sell upward of 75% of their linear ad inventory for the upcoming year in just a few short weeks may not make long-term sense. However, advertisers will always negotiate commitments to exercise their spending leverage and ensure they aren’t shut out of inventory crucial to the success of their brands.
That said, the methods used to achieve these goals via commitments are likely to evolve significantly from the TV markets of the recent past. If anything, the upfronts are poised to be revitalized thanks to the growth of programmatic technology.
In the “early days” of this fast-growing medium (i.e., just a few years ago), most marketers bought CTV in the same way as traditional TV — through direct deals. By last year, though, we saw the “early majority” of brands shift from direct I/O toward programmatic and this year we predict that the “late majority” will consolidate their CTV upfronts within a demand-side platform (DSP).
In fact, Advertiser Perceptions found that 69% of advertisers plan to utilize programmatic guaranteed and 56% plan to use private marketplace (PMP) buys in the next 12 months, compared to only 53% planning to use direct I/O. This shows us that TV buying behaviors are changing and mixed, hybrid buying methods are more popular than ever.
Buying TV directly or programmatically is only the first of many decisions buyers must make as they prepare their upfront strategy. Here are my predictions and how advertisers can capitalize on the growing shift toward programmatic.
1. Consolidate TV buys in a softer market: One main reason buyers want to participate in the upfront is to guarantee their share of coveted inventory. The challenge arises when this leads to a proliferation of direct deals that may target the same household too many times.
One of the biggest advantages of programmatic campaigns with a DSP, specifically via PMPs, is that you can consolidate CTV buys into a unified buying method. This allows you to understand and manage reach and frequency holistically and reduce overlap between CTV and linear, as well as overlap between publishers to maximize reach. This saves advertisers money while making for a better customer experience.
2. Uplevel audience strategies in a converging landscape: As an industry, we like to bucket TV into “linear” and “CTV,” but it’s all just TV to the consumer. The challenge for advertisers is connecting the dots between both channel types to understand things like holistic reach and frequency and who is being exposed to your ads regardless of what viewers are watching or how they are accessing content on their TVs.
TV buying behaviors are changing and mixed, hybrid buying methods are more popular than ever.”
With programmatic, these insights can be leveraged for advanced TV targeting that goes beyond basic demographic audiences. This starts with a foundation of diverse and holistic data, such as combining high-quality ACR data with set-top box data. This allows for a unified approach to TV. It also enables advertisers to reach their audiences more effectively by better understanding viewing behaviors and powering use cases, such as suppressing linear audiences on CTV to drive incremental reach.
3. Aim for identity-based supply at scale: All of these strategies are only effective if you can actually reach the right audiences. This is why having a foundation of identity within an ad platform — which powers more precise reach — is critical.
While cookie deprecation may seem irrelevant to TV buyers, it sets the stage for other signal deprecations, such as IP addresses. A lack of an “identity spine” also makes connecting measurement between digital channels and inventory difficult. That’s why TV buyers will increasingly value future-proof TV activation backed by robust identity.
Despite initial reservations, the industry is witnessing a significant shift toward programmatic buying, with a hybrid model proving to be particularly effective. As this trend continues, advertisers who embrace these changes will likely find themselves better positioned to reach their desired audiences more effectively and precisely.
